Coonawarra wineries hope Labor can repair lucrative markets lost amid trade tensions in China
Winemakers in one of Australia’s major wine regions are hoping a change in government will lead to improved relations with China and the removal of crippling export tariffs.
- Wine producers are cautiously optimistic that a new government will improve trade relations with China
- The South African government is trying to help wine producers break into more international markets
- The sector faces other issues such as rising input costs, declining global sales and domestic oversupply
The wine industry has been caught in the crossfire of diplomatic tensions between Australia and China under the Coalition, resulting in the effective closure of the lucrative Chinese market to Australian wine producers.
Before China imposed a moratorium on Australian wine, Hollick Estates in the prestigious Coonawarra wine district on South Australia’s limestone coast exported around 20% of its product to China.
Managing director Christian Fraser said he hoped to see a return to the market.
“It was a very cheap market because it was profitable and it was very reliable at the time,” he said.
“Commitment is always a very good thing to do, but I don’t know how it will end.”
Rymill Coonawarra winemaker Lewis White also expressed his hopes for the Labor government’s ability to move relations in a more positive direction.
“I don’t think it’s going to get any worse.”
But even if tariffs were lifted within the next 12 to 24 months, Mr White warned the damage had already been done.
“I suspect that our market share in China would either be replaced or by the time the tariffs were lifted, would have been replaced,” he said.
“If there was an appetite for our wines, we would go back to China, there are many advantages for the market.”
Coonawarra Vignerons Association chief executive Ockert Le Roux was also cautiously optimistic about a change, but said there were no details on how the government planned to move the relationship forward.
“It’s still early days,” he said.
However, Mr le Roux said it was positive that the Chinese government had sent a message of congratulations to new Prime Minister Anthony Albanese.
But he also cautioned about the kind of signal Australia’s participation in the Quad summit had sent to China and how that would be interpreted in Beijing.
Challenges and Opportunities
It comes as South Australian Trade and Investment Minister Nick Champion met with Coonawarra winemakers this week to discuss challenges facing the sector, including Chinese tariffs and a domestic oversupply.
Mr Champion said the best strategy for the industry was to diversify its export markets and create a high quality product.
“Obviously we want to move up the value chain, we want to make sure we’re making a premium product, but we’re also getting premium prices.”
Responding to Mr Champion’s visit, Mr Fraser said it was a strategy that had served Limestone Coast wineries well.
“We’re a bit isolated because we usually have a high-value product,” he said.
“We have established markets and I don’t think too many of us have been too committed to one market.
But with rising input costs for all producers and declining sales globally, leading to an oversupply of red wine domestically, the industry is at a difficult crossroads.
“Labour has been hard to find, fuel costs are up, it’s been tough,” Fraser said.
“But we’re a pretty resilient group of people, so we’re trying to push our way through.”
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